Private firm running Illinois Lottery fined $20 million for falling short on sales

Alex Garcia

LaMar Hasbrouck, director of the Illinois Department of Public Health, and Gov. Pat Quinn speaks about youth violence Monday. Quinn later talked about the private firm hired to run the Illinois Lottery not meeting its sales goals.

LaMar Hasbrouck, director of the Illinois Department of Public Health, and Gov. Pat Quinn speaks about youth violence Monday. Quinn later talked about the private firm hired to run the Illinois Lottery not meeting its sales goals. (Alex Garcia)

The private company in charge of running the Illinois Lottery will be fined $20 million for failing to generate the $851 million in sales it had promised.

Northstar Lottery Group sold $757 million worth of tickets during its first year in charge of day-to-day operations of the agency, $94 million short of what the company had projected.

The $757 million was more than the $593 million the state had the previous year, but under Northstar’s contract with the state, the firm can be fined each time it fails to meet sales goals. Alternatively, bonuses can be paid if the company exceeds certain revenue levels. The penalty will be subtracted from monthly payments the state makes to Northstar as part of its management fee.

A representative for Northstar questioned the state's revenue figures, saying a final audit for the company's first year in charge has yet to be completed. Spokeswoman Avis LaVelle also contended sales were closer to $781 million than the $757 million reported by the state.

"What is indisputable is that this has been the most successful year for the lottery ever in it's history," LaValle said. "We look forward to working with the lottery to come to terms on the final numbers, and we share a mutual desire to make the lottery increasingly successful year after year."

Democratic Gov. Pat Quinn was measured in his criticism of Northstar today, saying “the company has understanding that they have to do better.” Quinn said he wanted to see games that encourage a broader audience to play the lottery. Historically, lottery sales are highest in low-income communities.

“We want a model that reaches everyone in our state, and they have some work to do to make that happen,” Quinn said.

State officials picked Northstar to run the lottery after being frustrated by years of stagnant sales. The hope was an outside firm would streamline operations and focus on increasing profits.